2024 Will Be a Record Year
There is a new reporting requirement that small business owners need to know about. As of January 1, 2024 tens of millions of small businesses will need to file a beneficial ownership information (BOI) report with a branch of the U.S. Department of Treasury called the Financial Crimes Enforcement Network (better known as FinCEN). A failure to comply can result in a company and the individuals responsible for the non-compliance being subject to hefty civil and criminal fines and even possible jail time.
30 Million Small Businesses Are Affected
If you formed a corporation (S corp or C corp) or a limited liability company (LLC), a BOI report will have to be filed unless your corporation or LLC qualifies for an exemption (more on exemptions later). Corporations and LLCs are the only business entity types specifically referred to in the Rule. However, entities other than corporations and LLCs may also have to file. The key is whether you had to file a document with the secretary of state or a similar office to create your company. And while not addressed in the Rule, FinCEN has commented that it believes sole proprietorships and most general partnerships would not have to file a report because they do not require the filing of a formation document.
Start Compiling Early
Avoiding Rush and Errors: Filing early gives you more time to gather necessary documents and review your filing for accuracy. It reduces the stress of rushing to meet the deadline and lowers the chance of making mistakes on your filing.
Business Planning: Filing your report early can provide you with a clearer picture of your financial situation for the year. This can be especially helpful if you need to make adjustments to your budget, savings, or investment plans.
Peace of Mind: Filing early provides peace of mind, knowing that your BOI filing is taken care of well before the deadline. You won’t have to worry about last-minute issues or scrambling to meet the deadline.
